District Heating Market Size Analysis

According to a recent survey conducted by ChemView Consulting, the Global District Heating Market grew at a CAGR of 5.6% between 2017-2021 and is estimated to be US$ 1,51,327.4Mn in 2022. Currently, the market is anticipated to grow at a CAGR of 5.5% and is expected to reach a valuation of US$ 2,58,489.1Mn by 2032 end.

In places like Finland, the market for district heating is constrained. In the current, scholarly and political debate concerning third-party access (TPA) and opening the district heating networks to competition, for instance, Finnish Energy, the trade organization for the Finnish energy industry sector, is working to find solutions.

As a result, market participants are becoming aware of prospective policy ideas like the freedom to select from a variety of heating techniques and potential legal restrictions that limit the growth of the service industry.

Market Dynamic

GROWING URBANIZATION AND INDUSTRIALIZATION

One of the global megatrends is urbanization, and the need for district heating is increasing due to ongoing urban expansion. Due to the rising population movement from rural to urban areas, public spending has been rising.

As a result, the need for heating has been steadily increasing, and as a result, significant investments have been made in the district heating industry. District heating systems are made possible by structured infrastructure advances by growing urbanization. Demand for sustainable, effective, dependable utility services, such as district heating and electricity generation, is increasing in metropolitan areas.

Urbanization, the steady movement in human population residency from rural to urban regions, along with total population growth, might bring another 2.5 billion people to urban areas by 2050, according to new United Nations forecasts.

REDUCED EFFECTIVENESS IN SMALL HEATING LOADS AND SPACE CONSTRAINTS FOR DISTRIBUTION GRIDS

Big developers can use district heating for large-scale projects. The main reason is that small-scale developers do not adopt district heating in tandem with nearby developers due to their divergent building timetables and investments, even though they are aware of its advantages.

Small-scale developers choose traditional heating as a result, according to their schedule. District heating setups are typical in all new projects where space for a pipe network may be planned during building construction. Older structures might not have enough room for a pipe network, which restricts penetration. One of the main obstacles to adopting district heating systems is the installation of distribution pipes in pre-existing towns and districts that were not originally intended to have such a system.

INTEGRATION OF MULTIPLE ENERGY SOURCES

The capacity of district heating systems to combine various energy sources, such as waste heat and renewables, is one of their key benefits. However, the IEA reports that, down from 95% in 2000, roughly 90% of the world’s heat output in 2020 came from fossil fuels, notably coal (45%), natural gas (40%), and oil (5%).

The shift from third-generation to fourth-generation district heating will be accelerated by increased heat source diversity (especially from fossil fuels to renewables, electricity, and excess heat) and the integration of large-scale heat pumps. Fifth-generation district heating, which debuted in 2015, is a term for combined district heating and cooling networks that use distributed heat pumps and run at room temperature.

Market Segments Covered in Report

By Heat Source:

• Coal
• Natural Gas
• Renewables
• Oil and Petroleum Products
• Others

By Component:

• Boiler
• Insulated Pipeline
• Pumps
• Heat Exchanger
• Heat Meters
• Others

By Plant Type:

• Boiler Plants
• Combined Heat and Power
• Others

By Application:

• Residential
• Commercial
• Industrial

By Region and Country:

• North America (U.S., Canada)
• Latin America (Brazil, Mexico, Rest of Latin America)
• Europe (Germany, Italy, France, UK, Spain, Netherlands, Norway, Russia, Rest of Europe)
• Asia-Pacific (China, Japan, South Korea, India, Indonesia, Thailand, Vietnam, Australia & New Zealand, Rest of Asia-Pacific)
• Middle East (Saudi Arabia, Turkey, UAE, Rest of Middle East)
• Africa (South Africa, Nigeria, Egypt, Rest of Africa)

Segment-Wise Analysis

Why is the natural gas segment expected to grow with the highest CAGR during the forecast period?

During the projected period, the natural gas heat source sector is anticipated to have the greatest CAGR, at 5.9%. Since it is more efficient than electric heat pumps, it is mostly utilized for district heating.

This fuel can also be utilized in centralized systems to generate cozy heating through natural gas absorption devices that create hot steam. Additionally, natural gas is used extensively in the US residential sector for space and water heating.

Why is the combined heat and power (CHP) plant segment expected to grow with the highest CAGR during the forecast period?

The CHP segment is anticipated to register the second-highest CAGR of 6.9% during the projected period. As a result of CHP plants’ ability to minimize capital expenditure, offer economies of scale, reduce heat loss to the environment, and replace the usage of fossil fuels for district heating, greenhouse gas emissions are reduced.

They considerably improve power plant efficiency, which lowers fuel prices, carbon emissions, and local environmental harm. The requirements of mission-critical facilities, such as hospitals, data centers, research labs, etc., frequently influence the construction of CHP plants.

Region-Wise Analysis

The regions analyzed for the market include North America, Europe, Latin America, Asia Pacific, Middle East, and Africa.

• With a market share of 67.8%, Europe is anticipated to experience considerable growth over the forecast period. In the area, there is a significant increase in the need for energy and heating. The site even has prolonged periods of low temperature, which raises the need for heating water in residential, commercial, and industrial settings.
• The most attractive market for district heating is now Asia Pacific. Heating network investments are rising in China. China has seen the greatest deployment of heating plants due to its cold climate. Along with China, other nations, such as South Korea, are also expanding their heating capacities in this region, which is also seeing an increase in the installation of renewable heating plants.

Competition Analysis

The market is portrayed as fragmented, with producers and service providers. Over the years, these businesses have successfully secured brand-new, lengthy contracts from various nations in every location.

The recent developments in the Global District Heating Market:

• In March 2022, Fortum and Microsoft recently announced an innovative cooperation in which Fortum would gather the excess heat produced by a new data center that Microsoft will build in Helsinki, Finland. Fortum will employ the server cooling process to distribute clean heat to local residences, companies, and other structures connected to its district heating system. The data centers will be powered entirely by emission-free electricity. The data center will include the world’s largest waste heat recycling concept.
• In March 2022, Bristol City Leap is a 20-year concession to decarbonize the city. Ameresco, Inc., a leading cleantech integrator focused on energy efficiency and renewable energy, announced that it had been selected as a partner in the project. Through a special public-private partnership framework, Ameresco and Vattenfall Heat UK will combine to provide services like energy efficiency enhancements, wind and solar services, project finance, long-term operation and maintenance, and more. The Bristol City Leap initiative, which will last for 20 years, will pursue net zero objectives through a number of energy and infrastructure investment opportunities that will bring in about £1 billion in outside capital.

A list of some of the key suppliers present in the market are:

• Fortum
• Vattenfall
• ENGIE
• Danfoss
• Statkraft
• LOGSTOR
• Vital Energiv
• Kelag
• SHINRYO CORPORATION

Report Coverage and Highlights

• Our comprehensive, data-backed, and facts-oriented report provides niche and cross-sectional analysis at global and country levels.
• Assessment of the historical (actual data) and current market size (2017-2021), market projections (2022-2032), and CAGR.
• The market assessment across North America, Europe, East Asia, South Asia & Pacific, Latin America, Middle East, and Africa.
• Competitive tactical intelligence, key strategies adopted by top players, production capacity and company shares analysis, product brand surveys, and export-import analysis
• Pricing analysis to set and benchmark your current or future offerings across each product type helps you understand whether your pricing strategy is aligned with market expectations and can be compared to market disruptions.
• Predictions on critical supply and demand trends and technological expertise needed to address operations scalability.
• Consumer behavior shifts and their implications for players, list of end-users, and their consumption analysis.
• Key drivers, restraints, opportunities, and emerging trends impacting the market growth.
• Value chain analysis (list of manufacturers, distributors, end-users, and average profitability margins).
• Strategic market analysis, recommendations, and future headways on crucial winning strategies.

Report Includes

Market Size Data

• Global market size data, historical (2018 to 2022) and forecast (2023 to 2033), by each segment and region
• Regional level market size data, historical (2018 to 2022) and forecast (2023 to 2033), by each segment and country
• Country level market share data, historical (2018 to 2022) and forecast (2023 to 2033), by each segment
• Market attractiveness analysis based on market share index and CAGR index for each of the segments and regions
• Incremental dollar opportunity generated in the forecast period would be indicated
• Key Takeaways, Recommendations, and key investment pockets for the relevant segments would be highlighted

Market Background

• Macroeconomic factors that impact the market developments
• Market dynamics (Drivers, Restraints, Opportunities) that positively or negatively influence market growth
• Supply Side and Demand Side trends – trends witnessed from buyers and suppliers side
• Production and Consumption Gap Analysis – analysis of gap between production and consumption in any geography to fulfil unmet demand
• Trade analysis and analysis of key supply and demand hubs
• Identification of hotbed opportunities existing in the market
• Porter’s and PEST analysis to understand the business environment of the geography
• Regulatory scenario – Identification of key sector specific and trade regulations, and assessment of whether it helps or hinder market development & growth

Pricing Analysis

• Regional-level product pricing analysis to set and benchmark your current or future product offerings across each product type
• Historical and projected pricing trends of the product which helps in determining the product’s price and/or services beneficial for companies product lifecycle
• Cost teardown analysis and key factors impacting pricing

Value Chain Analysis

• Country-wise list of raw material suppliers
  • Raw material price trends and buyers’ sentiment
  • Overview of Intelligent Sourcing Technique
  • Raw material procurement requirements
  • Vendor selection criteria
• Country-wise list of product manufacturers
• Country-wise list of distributors/traders
• Country-wise list of end-users
  • End-Users/Customers consumption mapping
  • Key End-Users/Customers client list
• Country-wise list of other key channel partners
• Average profitability margins
• Regional value chain dynamics

Competition Analysis

• • Market shares and production capacities of key players
  • Tier structure analysis of market
  • Comprehensive competition dashboard representing the top 10-15 players in the market
  • Individual company profiles of top 15 to 20 manufacturers
    • Business Overview
    • Product Portfolio
    • Key Financials
    • Recent Developments
    • SWOT Analysis
    • Strategies

Country Coverage
North America: U.S., Canada
Latin America: Brazil, Mexico, Argentina, Central America, Rest of Latin America
Western Europe: Germany, Italy, France, UK, Spain, Poland, Romania, Rest of Western Europe
Eastern Europe: Russia & Belarus, Balkan Countries, Baltic Countries, Central Asia, Rest of Eastern Europe
Middle East & Africa: KSA, UAE, Turkey, Israel, Northern Africa, South Africa, Rest of Middle East & Africa
East Asia: China, Japan, South Korea
South Asia & Pacific: India, ASEAN, Australia & New Zealand, Rest of South Asia & Pacific

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